Snow and Wind No-Show: 3rd March 2019
Snow and Wind No-Show: 3rd March 2019
The week of February 25th to March 3rd 2019 has been a weather rollercoaster on the island of Ireland. On Tuesday, February 26th, afternoon temperatures reached 17oC. Five days later, on Sunday 3rd March, many areas in the southern half of the island were covered in snow. While for many people the memory of the weather on that Sunday afternoon will be of heavy rain turning to snow as temperatures dropped through the afternoon, some of us involved in the electricity market may remember it for something that didn’t show up…wind. The sixth winter storm this season, Storm Freya, tracked towards the Irish Sea and Britain from the south. On the western edge of this storm, a band of heavy rain moved northwards across the island of Ireland. At the southern edge of this band of rain there was much colder air. Just before 11am Met Eireann released a snow/ice warning for most of the country when updated forecasts predicting the southern edge of this weather system to fall as snow.
Source: MET Eireann
The effect that this weather pattern had on the electricity system was significant. Afternoon demand was about 300 MW higher than the previous Sunday, due to lower temperatures, however the difference in out-turn wind compared to the forecast produced on the previous day was a much bigger influence in the trading and dispatch of the system on that day. On the previous day, Saturday 2nd, participants submitted their bids and offers into the Day Ahead Market (DAM) for delivery the following day. Aggregate wind forecasts across the island were relatively high, particularly for the second half of the trading day. The publicly available wind forecast, published by Eirgrid, on the morning of March 2nd predicted wind output would peak at 3.4 GW at 8pm on March 3rd. This was driven by the prediction that once the band of rain/snow moved across the island, high winds would follow, and the significant amount of wind capacity installed in Cork and Kerry would begin to produce high levels of electricity in the early afternoon and more wind farms across the island would follow as the weather front tracked northwards. This didn’t happen. For much of the afternoon about one third of the Day Ahead forecast showed up. The chart below shows a breakdown of wind, imbalance volume and market prices for the Trading Day of March 3rd.
Figure 1: Wind, Net Imbalance Volume (positive = “short” system) Market Prices
The forecast at the Day Ahead stage is prime driver of the I-SEM market, with approximately 90% of volumes traded typically go through that auction and many wind traders would have sold high levels of forecasted wind for the afternoon of Sunday 3rd March at this stage. There is typically lower liquidity in subsequent market timeframes which would allow traders to trade to change position when they receive up to date wind forecasts from their forecast providers. By the time the real time dispatch came around, and with this wind failing to show up, the system was “short” from 12:30 onwards. At 18:30 the system was 1.6 GW short and the system operators dispatched conventional generation, including expensive peakers, to make up the shortfall. This caused imbalance prices to be very high in this period, peaking at 464 €/MWh at 18:00. The impact for a windfarm that traded, say, 80% of its DA forecast in the DA market is significant. It is likely that only 30% of that forecast will have materialised in the afternoon and therefore the windfarm would have had to buy back the forecast error at prices up to €464 per MWh This weekend illustrates the impact extreme weather can have on market prices in the Irish market and demonstrates the importance of having the right partner to manage or to absorb this balancing exposure.